Muhurat Trading 2023 Strategy: How Should Investors Brighten Their Portfolio In Future

The Muhurat trading, also recognized as Auspicious trading, is a one-hour trading session held on Diwali. Over the past ten Muhurat trading sessions, seven instances concluded with positive returns, highlighting the auspicious nature of the occasion for market participants, said, Harjeet Singh Arora, Managing Director at Mastertrust. With the end of Samvat 2079, and the onset of Samvat 2080, during the muhurat trading of 2023, investors can build a strategy to brighten their portfolio in future.

Here's how!

According to Mastertrust's MD, meticulous planning is imperative, particularly within the short time frame of Muhurat trading.

He added, "We have to clearly outline our financial goals whether we are looking for short-term gains or long-term investments. Usually, we witness volatile trading sessions hence thorough research is very important before deploying any trade. Look for companies with strong fundamentals, positive earnings reports, and growth potential. Additionally, we can also find stocks based on technical studies for short-term trading opportunities."

Managing risk is another important factor that cannot be ignored.

Risk management is a highly important part that we can't afford to ignore. Risk appetite varies from individual to individual, for long-term investment, portfolio risk could be mitigated by proper diversification. Investors are not recommended to concentrate all investments in one stock or sector. However, given the short duration of muhurat trading, liquidity is also a big factor. Especially for intraday traders, choose stocks with sufficient liquidity to ensure smooth execution of trades, Arora said.

Meanwhile, in general, Mukesh kochar, National Head of Wealth at AUM Capital said,investors follow the historical performance of a fund while considering investment in any fund. It should be filtered out as it will not help to see the performance in isolation. In the years to come, the top performers of last year may or may not deliver good returns. Consistency of performance, rather than top performances, should be taken into account by investors. Furthermore, it is necessary to take account of risk adjusted returns instead of performance alone.

Further, Kochar added that if funds are to be identified in conjunction with the trend of the market, then values such as Standard Deviations, Sortation Ratio, Sharpe and Beta etc. should be used.Proper asset allocation, with proper diversification and periodic rebalancing of the portfolio, must be maintained at all times. It is important to invest in equity funds over a long period of time and there should be little focus on 1 year's returns from muhurat to muharat. The main thing is that in order to avoid short term volatility, you need to start building your portfolio soon and investing regularly for a longer period.

In this market scenario, Kochar loves the multicap strategy. He said, "The large cap component in the multicap strategy provides stability for a portfolio, while Mid and Small Cap acts as an incentive to achieve performance. Given that the election, geo-policy developments and Fed stance will have an effect on markets for a while, but we're very positive about the longer term. There's a lot of liquidity on the sidelines that could be helpful to the stock market in any correction phase."

Since last year's Muhurat trading, Sensex has gained by 5,597.53 points or 9.43%, while Nifty 50 has rallied by 1,849.05 points or 10.52% to date. From last year's muhurat trading, Nifty has outperformed its counterpart Sensex.

This year, both BSE and NSE will allow trading in the equities market on November 12 for one hour starting from 6:00 p.m. to 7:15 p.m.

Outlook for the Samvat 2080:

Mastertrust's Arora said, "In light of mounting fundamental tailwinds, the market is poised to sustain its prevailing bullish momentum into Vikram Samvat 2080. Renowned global banks and financial institutions have clearly expressed optimism towards the Indian market. The stage of a bullish scenario is being set by strong corporate performance, overwhelming domestic economic numbers, and growing expectations of the return of the Modi government, known for its pro-business policies. FDI inflows in India stood at US $ 45.15 billion in 2014-2015 which has increased to the highest ever FDI at $83.6 billion in 2021-2022. The bullish sentiment is further bolstered by the speculation that the U.S. Federal Reserve has concluded its rate hike cycle, a factor contributing to the positive market outlook."

Arora finally also said, "Investment in equity and gold should depend on your investment objective, time horizon, and risk profile, but proper asset allocation is require in the portfolio. Gold has been considered a safe-haven asset and used as a hedge against inflation. Gold should be viewed as a long-term investment option rather than a short-term investment. Equity markets have remained volatile both in India and globally but outperformed against other asset class. One should invest in equity from a long-term investment perspective, the equity market can deliver a phenomenal return. Ideally, you should diversify investments in sync with your risk appetite and your original investment plan that you have made for achieving your short and long-term financial goals."

Lastly, Sunil shah, director at Kambatta Securities said, "Indian equities are expected to outperform most other global markets in the face of continued geopolitical uncertainties and relatively higher domestic economic growth. The major themes will be domestic consumption and premiumisation, enabling companies to post strong earnings growth aided by margin accretion. Infra and construction plays are expected to do well as the government's thrust on infrastructure development is seen to continue, while higher budgetary allocation in rural-focus schemes can help drive a recovery in rural consumption, especially with the upcoming budget being the last one before the general elections. In spite of rich valuations in the small- and mid-cap segments, companies with fundamentally strong businesses and good earnings growth continue to justify their valuation. If US bond yields start coming down by the second half of CY2024, FPIs will come back to the party. Upcoming state and general elections can make the market move sideways. Inflation, interest rate trajectory, and geopolitical tensions will remain the key risks."